by Lisa R. Schoolcraft
Atlanta’s Haverty Furniture Companies Inc. is set to spend nearly half of its advertising dollars this year to push its own brand of furniture.
Havertys (NYSE: HVT) has enlisted the help of Atlanta-based Fitzgerald+CO for that job, and the first ads should hit airwaves and newsprint in late September or early October.
Havertys will spend more than $60 million in advertising this year, said Dennis Fink, Havertys chief financial officer. Fitzgerald+CO will take over about half of the advertising dollars, he said.
Havertys has been moving toward selling more of its own brand, called Havertys Collection, which represents 60 percent to 65 percent of its furniture sales, excluding bedding. By the end of this year, Havertys projects its brand will represent 80 percent of its sales, said Clarence Smith, company president and CEO.
“We’re building a brand that needs to compete with other national brands,” Smith said, which is why Havertys sought outside advertising help with its goals.
Havertys, with 118 stores in 17 states in the South and Midwest, reported $832.4 million in revenue in 2012. By contrast, Danbury, Conn.-based Ethan Allen Interiors Inc. (NYSE: ETH), with 126 stores, reported just over $1 billion in annual sales for the fiscal year ending June 30, company filings show.
Total retail sales of residential furniture and bedding was $84 billion in 2012 and is projected to be nearly $86 billion this year, according to a March report by Retail Forward, a retail research firm. Furniture stores account for 53.2 percent of furniture sales, the report said, and sales in the furniture industry are expected to be $112 billion by 2017.
Havertys talked to 12 different ad firms, finally choosing Fitzgerald+CO, which ranked third among Atlanta’s top advertising agencies, according to Atlanta Business Chronicle’s May 19 list of top advertising and marketing firms. Fitzgerald+CO merged in 2012 with Austin Kelley Advertising Inc., which ranked 12th in 2012, in November.
Havertys’ business represents the fifth-largest account for Fitzgerald+CO, said Dave Fitzgerald, president and CEO. Fitzgerald+CO, a member of the Interpublic Group of Companies Inc., also counts AFLAC Inc. (NYSE: AFL), AmSouth Bancorp. (NYSE: ASO), and Atlanta-based companies The Coca-Cola Co. (NYSE: KO) and United Parcel Service Inc. (NYSE: UPS) among its clients.
In the past, Havertys built its name as a furniture retailer, while other furniture manufacturers built their own brands that Havertys sold, Fitzgerald said.
The challenge is a lot more succinct when the furniture brand Havertys is selling is also its retail brand, he said.
“The branding will be a lot more powerful,” Fitzgerald said. “There are very few examples in retailing where the brand on the door is the same as the brand on the floor.”
Furniture stores face stiff competition these days, not just from other stores, but from discounters like Wal-Mart and wholesale warehouse clubs like Costco and Sam’s Club, both of which offer furniture, said Retail Forward’s report.
